Today I elected to short MIDD. I have had odious success--or should I say spectacular failures-- with shorting. I'm working on technique, and my losses have been small. I have an average cost of $110.26 in this stock. It runs pretty wild on a daily basis because it is very illiquid--which can work either for me or agin' me.
Monday, January 29, 2007
MIDD
Today I elected to short MIDD. I have had odious success--or should I say spectacular failures-- with shorting. I'm working on technique, and my losses have been small. I have an average cost of $110.26 in this stock. It runs pretty wild on a daily basis because it is very illiquid--which can work either for me or agin' me.
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3 comments:
MIDD has the look of a "trading stock": not a complement. But a trading stock with a story and a very low float can be a very dangerous creature to short.
Their rocket oven is just far enough down the road... This could reach up to the toaster-oven glories (sort of) not seen since Sunbeam in its Chainsaw Al days. You may have a little more mountain to climb until you reach your valley.
What does look positive is all the insider selling. If the future is so bright why are they willing to give up so many of their precious shares.
Russell, all good points. The stock has already moved pretty far ahead on the news of the rocket fryer and has the looks of topping out.
Regarding insiders...I don't place a high degree of reliance on this. Many insiders sell to diversify their overall risks--but if I see amounts that are alarming, I'll certainly take a pause. Conversely, I like to use insider buying as a "tell".
According to Michael Burke, insider buying is a reasonable "tell".
Burke says that selling occurs for all kinds of reasons (diversification; kids going to college; divorce settlement, etc., etc.) so it's not wise to consider insider selling as a strong indicator.
On the other hand, if I see lots and lots of people bailing, I take it as a reason to pause.
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